Real Estate Math Class : Lesson 79

What is the annual interest rate on a 12,000 loan when the interest payments are 960 dollars semi-annually on the full amount of the loan ?

The answers, along with the corresponding solution, will be posted below the photographs at the bottom of the page, so spend a little time on it before you make your way to the bottom. It helps to keep your math skills sharp. Hope you have a fine week ahead.

A. 16% or .16

First, multiply 960 times two to derive the total annual amount of the semi-annual payments, and we get the sum of 1920.

Now, let's devide the full amount of the loan, 12,000 dollars into the combined semi-annual total of 1920 and we find that we have .16 or 16% annual interest.

Another way of doing it is to divide the total loan amount by two and find that we have 6000. Then we take one of the semi-annual interest payments, 960 dollars, and divide 960 by the semi-annual sum of the loan amount, 6000, and also discover that we have .16 or 16% annual interest rate on the total loan.

No cheetan'.....